Correlation Between Avino Silver and Sprott Physical

Can any of the company-specific risk be diversified away by investing in both Avino Silver and Sprott Physical at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Avino Silver and Sprott Physical into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Avino Silver Gold and Sprott Physical Silver, you can compare the effects of market volatilities on Avino Silver and Sprott Physical and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Avino Silver with a short position of Sprott Physical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Avino Silver and Sprott Physical.

Diversification Opportunities for Avino Silver and Sprott Physical

0.93

Correlation Coefficient

Avino Silver  Sprott Physical

Almost no diversification

The 3 months correlation between Avino and Sprott is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding Avino Silver Gold and Sprott Physical Silver in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sprott Physical Silver and Avino Silver is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Avino Silver Gold are associated (or correlated) with Sprott Physical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sprott Physical Silver has no effect on the direction of Avino Silver i.e., Avino Silver and Sprott Physical go up and down completely randomly.

Pair Corralation between Avino Silver and Sprott Physical

Assuming the 90 days trading horizon Avino Silver Gold is expected to generate 2.19 times more return on investment than Sprott Physical. However, Avino Silver is 2.19 times more volatile than Sprott Physical Silver. It trades about 0.08 of its potential returns per unit of risk. Sprott Physical Silver is currently generating about 0.07 per unit of risk. If you would invest  142.00  in Avino Silver Gold on September 13, 2024 and sell it today you would earn a total of  24.00  from holding Avino Silver Gold or generate 16.9% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Strong
Accuracy	100.0%
Values	Daily Returns

Avino Silver Gold  vs.  Sprott Physical Silver

Avino Silver Gold

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Avino Silver Gold are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of very abnormal primary indicators, Avino Silver displayed solid returns over the last few months and may actually be approaching a breakup point.

Sprott Physical Silver

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Sprott Physical Silver are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating basic indicators, Sprott Physical may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Avino Silver and Sprott Physical

The main advantage of trading using opposite Avino Silver and Sprott Physical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Avino Silver position performs unexpectedly, Sprott Physical can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Sprott Physical will offset losses from the drop in Sprott Physical's long position.

The idea behind Avino Silver Gold and Sprott Physical Silver pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

Check out your portfolio center.

Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Equity Valuation module to check real value of public entities based on technical and fundamental data.